Something bigger in the making? Watch the signs building up currenty

Frank Walbaum FX Strategies.Asia

Important News for the day

Fri, 28th EU German prelim. consumer price index.
Fri, 28th, 14:30 CET US PCE price index.

US tariffs

President Trump pointed out once more that tariffs against Mexico and Canada are being implemented on the 04th of March. Both countries would then face 25% duties on good imported to the US. Furthermore, also China will face 20% of duties on products imported to the United States. Stock markets seem to take this with a grain of salt for now. The prospects of rising prices and rowing momentum in the US economy seems to be reduced. Selling pressure had begun, which can be seen in all markets.

Market talk

The volatility in markets continues to rise and with it falling prices. In particular US stock markets show signs of bearish momentum. The VIX volatility index, which tracks the volatility on the S&P 500 equity index keeps pushing higher. Investors hence seem to be prepared to hedge their stock positions by purchasing options and pay higher premiums for that. Meanwhile also tech companies from China have lost some steam. The share price of Alibaba and Xiaomi show potential negative sentiment moving forward. Also the crypto market is heading to lower levels. Most tokens continue their slide in prices and the situation might be more intense here. Many traders invest in this market in leveraged positions and hence might need to be forced to liquidate once prices start to fall.

Tendencies in the markets

Equities negative, USD stronger, cryptos weaker, oil weak, Silver weak, Gold weaker, JPY sideways.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

EUR/USD clings to daily gains, still below 1.1900

EUR/USD manages to reverse two daily pullbacks in a row and advances modestly on Thursday, hovering around the 1.1880 zone amid the inconclusive price action around the US Dollar. Meanwhile, weekly Initial Claims rose more than expected last week, while attention is expected to shift to the upcoming US CPI data on Friday.

GBP/USD picks up pace, hits 1.3640

GBP/USD trades with modest gains around 1.3640 so far on Thursday. Indeed, Cable looks to leave behind the weakness seen in the first half of the week in a context of an equally erratic performance in the Greenback and disappoting UK data releases.

Gold stays offered below $5,100

Gold keeps the choppy trade well in place on Thursday, navigating the area below the $5,100 mark per troy ounce amid the lack of clear direction in the Greenback, declining US Treasury yields across the curve and caution ahead of Friday’s publication of US CPI.